TIOL-DDT 2039 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2039</font><br>
06.02.2013<br>
Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Today, We have heard an Unpleasant Story: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<strong><em>TODAY</em></strong><em>,
we have heard an unpleasant story</em>"; this is how a CESTAT Order
starts. Read on ...</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a direction by the Bench to the appellant to pre-deposit an amount of differential duty of (Rs.1,30,736/-) plus Rs.50,000/- towards penalty within six weeks. The appellant approached the Assistant Commissioner concerned with a Demand Draft covering these amounts on 6/8/2012. The draft was not accepted. It is further pointed out that, even prior to 6/8/2012, the appellant had informed the Assistant Commissioner in writing to the effect that the Tribunal had granted waiver and stay subject to partial pre-deposit. Meanwhile, a Bank Guarantee for Rs. 5,65,750/- (furnished by the assessee for provisional release of the subject goods) came to be enforced and, thereby, the department recovered the said amount. This recovery took place on 22/8/2012. An explanation given by the Department's AR is that the stay order was received by the respondent-Commissioner only on 30/8/2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal was hardly impressed with this submission inasmuch as that order was passed after hearing the Authorised Representative of the department also. The department was aware of the stay order passed by this Bench as early as on 12.7.2012. Shortly thereafter, the party submitted a letter to the Assistant Commissioner intimating the stay order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Prima facie , their entreaties fell on deaf ears. The result is that excessive recovery was made from the appellant, with which the Tribunal is unhappy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal observed, "<em>The miscellaneous application filed by the appellant for refund of the excess amount has to be allowed not only as a relief to the appellant <strong>but also as a lesson for the department</strong> to be circumspect in similar situations <strong>without precipitating unsavoury controversies</strong>. We allow this application and direct that the excess amount recovered from the appellant be refunded to them within two weeks from the date of receipt of a certified copy of this order."</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Lesson for the department?</strong> The Department has absolute contempt for the Supreme Court and it is doubtful whether they would learn any lesson from the Tribunal's Order! </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2013/2013-TIOL-230-CESTAT-BANG.htm" target="_blank">2013-TIOL-230-CESTAT-BANG</a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Prohibition on Export of Edible Oils</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EXPORT</strong> of edible oils was initially prohibited for a period of one year with effect from 17.03.2008 vide Notification No. 85 dated 17.03.2008 which was extended from time to time. Vide Notification No. 24(RE-2012)/2009-14 dated 19th October 2012, prohibition on export of edible oil has been extended till further orders.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Following exemptions are permitted from the prohibition on export of edible oils: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Castor oil </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Coconut oil from all EDI Ports and through Land Custom Stations(LCS) [LCS to be notified separately] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Deemed export of edible oils(as input raw material) from DTA to 100% EOUs for production of non-edible goods to be exported </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) Edible oils from Domestic Tariff Area (DTA) to Special Economic Zones (SEZs) to be consumed by SEZ units for manufacture of processed food products, subject to applicable value addition norms </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) Edible oils produced out of minor forest produce, ITC(HS) Code 15159010, 15159020, 15159030, 15159040, 15179010 and 15219020. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export of edible oils in branded consumer packs of upto 5 Kgs is permitted with a Minimum Export Price of USD 1500 per MT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The prohibition will not apply to export of Peanut Butter, ITC (HS) Code 15179020. [This already stands notified at Sl. No. 10 of the Table in Para 1 of Notification No. 31(RE-2012)/2009-14 dated 4th February, 2013 - Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16916" target="_blank">yesterday's DDT</a></strong>]</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not032.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 32(RE-2012)/2009-14, Dated: February 05 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Court can be sharp when someone disobeys its orders: SC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CHIEF</strong> Secretaries of Tamil Nadu, Gujarat and Arunachal Pradesh narrowly missed being arrested by the Supreme Court yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In its order on 17.1.2013, the Supreme Court ordered, <em>"the Chief Secretaries of the State of Arunachal Pradesh, State of Goa, State of Gujarat, State of Orissa and State of Tamil Nadu, are directed to be present in the Court at 10.30 a.m., (on 5.2.2013) to explain as to why the matter has not been treated with the seriousness it deserves</em>”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, the Chief Secretaries of Goa and Orissa attended the Court but the other three did not bother inviting the ire of the Supreme Court. The Court told the Counsels for these States, “<em>Don't fool around with the court. The court can be sharp when needed</em>.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court said, <em>"We will issue non-bailable warrants against the three Chief Secretaries. Let them not think that we in Supreme Court pass orders for passing time. Why do the officers not respond till we take extreme measures?"</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is time the Babus recognized that Court Orders are meant to be obeyed. </font></p>
<p align="justify"><strong><font color="#333366" size="2" face="Verdana, Arial, Helvetica, sans-serif">Be you ever so high, yet the law is above you</font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 211 Crores Air India Service Tax matter is remanded by CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>our earlier <strong>DDT </strong>Columns <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15940" target="_blank">1948</a></strong> & <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16153" target="_blank">1969 </a></strong>we had mentioned about this case - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notice issued to the applicants at the address mentioned in Col. 6 of Form ST-5 was received back with postal remark 'incomplete address' - no request for adjournment - Stay application dismissed - applicant directed to deposit the adjudged dues to obtain stay: CESTAT.<strong> <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-1283-CESTAT-MUM.htm" target="_blank">(2012-TIOL-1283-CESTAT-MUM)</a></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ST - Notice of hearing was received back un-served with remarks 'Refused' - Since Stay application was disposed <em><strong>ex-parte,</strong></em> order recalled and Stay application restored to its original number - since revenue involved is more than Rs.211 Crores, matter posted for disposal of Stay application - Miscellaneous application allowed: CESTAT. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-1484-CESTAT-MUM.htm" target="_blank"><font size="1">(2012-TIOL-1484-CESTAT-MUM)</font></a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Stay application was finally heard by the Bench last December. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this is what the Bench held - </font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"</font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">5.1 On the reading of the above, it is clear that the adjudicating authority has not rebutted the claims of the appellant after examining the figures furnished by them and the reconciliation statement submitted by them. Thus, the ground for rejection of the claim made by the appellant is flimsy. Nothing prevented the adjudicating authority to call for relevant records of the appellant and satisfy himself as to the correctness and accuracy of the figures submitted by the appellant, in case he had any reason to doubt the veracity of the appellant's claim. Therefore, we are of the view that the matter has to go back to the adjudicating authority for consideration afresh by keeping in mind the fact that while the balance-sheet figures are on accrual basis, the liability to discharge Service Tax is on cash basis. The reconciliation statement provided by the appellant shall be examined carefully in detail and if need be by calling for the relevant records from which the figures have been taken."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With these directions, the appeal was disposed of by way of remand and the Stay petition was disposed of. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Probably by the time the dumped <em><strong>Boeing 787 Dreamliner</strong></em> gets new Batteries, the denovo adjudication process would be over! </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please See <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2013/2013-TIOL-229-CESTAT-MUM.htm" target="_blank">2013-TIOL-229-CESTAT-MUM</a></font></font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">JM Kishore among WCO Awardees</font></strong></font></p>
<p align="center"><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">FM Calls for Non-Adversarial Tax Administration</font></strong></font></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/wco_awardees.jpg" alt="Legal Corner Icon" width="479" height="108" hspace="5" border="0" align="center"></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">JM </font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Kishore is an appraiser with Vizag Customs. He has been an appraiser for the last 17 years. This year the CBEC honoured him with the WCO Certificate of Meritalong with 13 other officers. In 2006, Kishore had won an international competition conducted by WCO on classification. Why we mention Kishore particularly is because he had contributed several analytical <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=newsch/guest/jmkishore.htm"><strong>articles</strong> </a>for TIOL. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The function to present the awards was held yesterday at the Zorawat Auditorium in Manekshaw Centre, New Delhi. It was a multiple function to </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 Present the Presidential awards by the Finance Minister - Investiture Ceremony.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Present the WCO Certificates of Merit.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Honour the former Chairmen of CBEC.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The investiture ceremony had to be shifted from the main auditorium to a small hall, as there was power failure in the main auditorium. Finance Minister Chidambaram presented the Appreciation Certificates to the thirty five officers who were conferred the award for “Specially Distinguished Record of Service” in 2012. He extended his compliments to the recipients and lauded the role of the Department in trade facilitation and enforcement and its contribution to the national exchequer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Once Investiture was over, power was restored and the function shifted to the main hall. Revenue Secretary Sumit Bose was the Chief Guest. WCO certificates were distributed and former Chairmen of the CBEC were felicitated. The function was graced by all the ladies who are Members of the CBEC including the Chairperson. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/wco_awardees_1.jpg" alt="Legal Corner Icon" width="400" height="279" hspace="5" border="0" align="center"></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">FM presenting the Presidential Award to Subhash Prasad Singh, Inspector, Commissionerate of Service Tax, Mumbai-I </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">Cadre review:</font></strong> The FM said that cadre review would be considered on a priority basis if CBEC would provide clarifications for the points raised by him. Now, what are his queries and why is CBEC not answering the Minister's queries?Why is CBDT cadre review held up when there are no pending queries? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">Non-Adversarial Tax Administration:</font></strong> The Finance Minister wanted non-intrusive intelligence gathering, and a non-adversarial tax administration. “Once the tax payer is confident that the relationship between a tax payer and officer is not a hostile relationship, you will find more and more people have become compliant to tax laws.”, he said. The Revenue Secretary said, “We will collect taxes in just and fair manner. We will stick to the fiscal targets that the government has fixed for us. We will collect revenues, but again in a just and fair manner,” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Aren't these people far away from reality? - Every day we find intrusive investigation by the most adversarial tax administration with the most hostile possible relationship and taxes being collected in the most unfair and barbaric ways. Are they not aware of the draconian New Year Circular? Who is to blame? The FM or the Inspector?</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Thursday's cases</font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Service Tax</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Construction of Boys and Girls hostel for students of medical institute - there is no allegation that building is being used for any other purpose - no cause for payment of ST under category of ‘Works Contract Services' - order set aside and appeal allowed with consequential relief: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants have constructed a Boys and Girls Hostel for students of an educational institution. They got registered themselves with the Revenue authorities and paid service tax on the said activity under ‘Works Contract services' for the period April 2008 to September 2008. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After educating themselves, the appellants realized that as they are not constructing any building which is being used for commercial purpose they are not liable for service tax. They stopped paying service tax but continued to file their service tax return. Consequently, they filed refund claim of the service tax paid by them for the period April 2008 to September 2008. The fate of those claims is not known. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether merely because assessee has got separate TAN for Head Office and field office, certificate for lower TDS deduction issued u/s 197(2) would become redundant - NO: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether merely because the assessee has got separate TAN for its Head Office and a field office, the certificate for lower TDS deduction issued u/s 197(2) would become redundant and Whether when such certificate is addressed to the principal officer of the assessee at its HO, other officers of the assessee company located at other places can also grant lower TDS benefits to contractors covered u/s 194C. And the verdict goes against the Revenue. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Clearance of pressure boosting system consisting of more than one pump and control panel, cable, switches etc. by classifying the same under SH 8413 70 10 & claiming benefit of exemption under notfn. 10/2006-CE as applicable to “Power driven pumps” - since classification of goods is not being disputed by Revenue, prima facie benefit cannot be denied - strong case for waiver of pre-deposit of dues - Stay petition allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>applicants engaged in the manufacture of power driven pumps were clearing a “set of pumps” by describing the same as “pressure booster system” and by classifying the same under sub-heading 8413 70 10 of the Central Excise Tariff and claiming the benefit of Notification 10/2006-CE. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue sought to deny the exemption on the ground that the applicants are clearing the pressure booster system which consists of more than one pump and the product in question is assembled to electric motors, shaft, ball bearing, casing, impeller etc. Inasmuch as since the product viz. pressure booster system consists of power driven pumps, control panel, water tanks, cable, switches, the same could not be considered as a power driven pump, is the Revenue contention. The proceedings lead to confirmation of a demand of Rs.68,44,267/- along with imposition of interest and penalty by the CCE, Kolhapur . </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com</strong> </a></font></p>
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